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FOREWORD DINA HOWELL Chief Executive Officer Saatchi & Saatchi XI’m passionate about marketing. to them. They browse, dig, explore, dreamI believe consumers will tell us what they and master, and then they’re ready to buywant and need in their lives, if only we will with confidence. And what they learn, theylisten anew every day. share with others. At Saatchi & Saatchi X, we recently The Zero Moment of Truth influenc-conducted a study to understand the es which brands make the shopping list,emotional benefits that drive and influ- where shoppers choose to buy and withence shopping behavior. Those benefits, whom they share the results. It’s up to uswe found, include the satisfaction of deep to join the conversation at this new mo-needs for self-creation, mastery, security ment where decisions are being made, andand connection. to provide the information that shoppers Shoppers today want to explore and naturally crave, in all the ways that theythink about how products can improve crave it.their lives. They do reconnaissance to gain I’ve known and respected Jim Lecinskithe insights they need, and they’re driven for many years. He and the Google teamto bond with others and enrich relation- have been trusted colleagues and advisersships as they learn. They are motivated by through the amazing growth and new op-a desire to take charge of their own iden- portunities of the online world during mytities and the well-being of their families tenure at Procter & Gamble, as well as inand homes. my current agency leadership role. The process of meeting those shopper This book will help anyone interestedneeds begins at the Zero Moment of Truth. in those new moments before people buy, Most of us understand the critical de- those Zero Moments of Truth where firstcision moment at the shelf — the First impressions happen and the path to pur-Moment of Truth, as we named it when chase often begins. If you care about help-I was at Procter & Gamble. Yet today’s ing shoppers explore, dream and find whatconsumers know so much more before they’re looking for — in short, if you’rethey reach the shelf. They find incredible passionate about the future of marketingdetail online, from every possible source, — this book is for you.about the brands and products that matter 7

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E RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE R RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RUHE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE NG THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGINNGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANG NGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK COOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOO RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RUHE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE NG THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGINNGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANG NGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK COOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOO RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RUHE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE NG THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGINNGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANG NGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK COOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOO RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RUHE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE NG THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGINNGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANG NGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK COOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOO RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RUHE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE NG THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGINNGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANG NGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK COOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOO RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RUHE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE NG THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGINNGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANG NGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK COOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOO RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RUHE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE NG THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANGINNGING THE RULEBOOK CHANGING THE RULEBOOK CHANGING THE RULEBOOK CHANG

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CHAPTER 1 CHANGING THE RULEBOOK “When consumers hear about a product today, their first reaction is ‘Let me search online for it.’ And so they go on a journey of discovery: about a product, a service, an issue, an opportunity. Today you are not behind your competition. You are not behind the technology. You are behind your consumer.” — Rishad Tobaccowala Chief Strategy & Innovation Officer VivaKiEvery so often, something comes much does it cost? What’s the ballroomalong and changes the rulebook. like?” And when I was done, then I made A few months ago I stayed in a rather my decision.large hotel in New York City. On the way Why am I telling you this?up to my room I saw a lobby poster: “See Because that little moment is the mo-the Max Weinberg Band in the ballroom ment that’s changing the marketing rule-tonight at 8 p.m.” book. It’s a new decision-making moment Now, I happen to like Max Weinberg. that takes place a hundred million times aSo this was a classic marketing situation: day on mobile phones, laptops and wiredThe stimulus is the poster — “see Max devices of all kinds. It’s a moment whereWeinberg!” — and my response is obvi- marketing happens, where informationously to go down to the ballroom at eight, happens, and where consumers makebuy a ticket and see the show. choices that affect the success and failure But I didn’t do that. of nearly every brand in the world. Instead I went up to my room, opened At Google, we call this the Zeromy laptop and started searching. Because Moment of Truth, or simply ZMOTI wanted to know, “What kind of music (“ZEE-mot”).1is he playing? What’s his band like? How 9

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A Zero Moment of Truth is: A BUSY MOM IN A MINIVAN, looking up decongestants on her mobile phone as she waits to pick up her son at school. AN OFFICE MANAGER AT HER DESK, comparing laser printer prices and ink cartridge costs before heading to the office supply store. A STUDENT IN A CAFE, scanning user ratings and reviews while looking for a cheap hotel in Barcelona. A WINTER SPORTS FAN IN A SKI STORE, pulling out a mobile phone to look at video reviews of the latest snowboards. A YOUNG WOMAN IN HER CONDO, searching the web for juicy details about a new guy before a blind date.ZMOT is that moment when you grab your laptop, mobile phone or some other wireddevice and start learning about a product or service (or potential boyfriend) you’rethinking about trying or buying. I’m sure you know what I mean — you probably doweb searches like this every day. BUTWould it surprise you to know that a full 70% ofAmericans now say they look at product reviewsbefore making a purchase? 2Or that 79% of consumers now say they use a smart-phone to help with shopping?3Or that 83% of moms say they do online researchafter seeing TV commercials for products thatinterest them? 410

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Chapter 1: Changing the Rulebook Those incredible numbers shouldn’t surprise us anymore. This is how consumerslive and learn and make decisions today: from ratings and review sites, from friends onsocial media, at home and on the go, and (more than ever) from video. They learn fromsearch results, user reviews, four-star ratings, text ads, image ads, news headlines, videosand even good old-fashioned official brand websites. They learn and decide, in short, at the Zero Moment of Truth. * * * Let me take one step back. On September 21 of 2005, The Wall Street Journal published a front-page story thatchanged the face of marketing. That story was about the critical importance of the seven seconds after a shopper firstencounters a store shelf full of detergents or toothpaste or anything else. Remember theold phrase, “Look for it in your grocer’s freezer case”? That’s the moment we’re talk-ing about — when you’re standing there, looking at all that frozen pizza and decidingwhich to buy. Procter & Gamble called that moment the First Moment of Truth, or FMOT(“EFF-mot”). This moment was so important to P&G that they created a position titledDirector of FMOT, and tapped Dina Howell to fill the job. And The Wall Street Journalfound it so influential that they put it on the front page. The same year, in his foreword to Kevin Roberts’ remarkable book Lovemarks,Procter & Gamble CEO A.G. Lafley put it this way: The best brands consistently win two moments of truth. The first moment occurs at the store shelf, when a consumer decides whether to buy one brand or another. The second occurs at home, when she uses the brand — and is delighted, or isn’t.Mr. Lafley was right then and he’s right now. Those first and second moments of truthare just as vital today. AND Now there’s a new critical moment of decision that happens before consumers get totheir grocer’s freezer case. Whether you sell yachts or shaving cream, your customers’first impression — and quite possibly their final decision — will be made in that moment:ZMOT. Marketers devote tremendous amounts of energy and money to the first two momentsof truth. But the new question is: Are you winning the Zero Moment of Truth? * * * 11

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ZMOT: Winning the Zero Moment of Truth We’ve spent a lot of time thinking about this question at Google. ZMOT is now core training for all members of the Google sales team. It’s part ofour DNA — not just in the U.S., but around the world. (Our Australian team, naturally,calls it ZedMOT.) We’re in a unique position to observe the power of ZMOT: its power to help shop-pers make great decisions and its power to help companies tell their stories at the mo-ment of highest impact. ZMOT turns small wins into huge ones — and potentially bigwins into letdowns — millions of times a day, around the clock. To define the impact of ZMOT in numbers, we commissioned a major study fromthe independent research firm Shopper Sciences. They reached 5,000 shoppers across 12different subcategories with surveys specially designed to show exactly which sourcesinfluenced shopper buying decisions. I’ll share that research with you for the first timehere. This is a book about transformation and change. I’m going to show you how to makethat change work for you and your company. * * * If you’re the type who likes to peek ahead, I’ll tell you right now what you’ll find inthis book.• The buying decision journey has changed. ZMOT is a vital new addition to the classic three-step process of stimulus, shelf, experience.• What was once a message is now a conversation. Shoppers today find and share their own information about products, in their own way, on their own time.• Word of mouth is stronger than ever. For the first time in human his- tory, word of mouth is a digitally archived medium.• No MOT is too small. If consumers will do research online for houses and health care, they’ll also do it for Band-Aids and ballpoint pens.• The MOTs are meeting. Our mobile devices are MOT machines. As mobile usage grows, the zero, first and second moments of truth are converging. I’ve talked with a number of leading marketers about ZMOT and I’ll also be sharingtheir wisdom with you: how to know what customers are looking for, be part of theconversation and win the day.12

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MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODE EL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEWHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEWHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEWHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEWHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEWHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEWHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEWHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEWHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEWHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEWHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEWHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEWHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEWHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEWHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEHE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW MENTAL MODEL THE NEW

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CHAPTER 2 T H E N E W M E N TA L MODEL“Engagement with the customer today isn’t just pouring a messagedown on their head and hoping they get wet.It really is understanding that you must be present in a conversa-tion when they want to have it, not when you want to.Pre-shopping before buying has become a huge, huge part ofcustomer behavior. In the past, it was pretty much confined tobig-ticket items like cars, or expensive electronics or homes. Nowpeople engage in discovery before shopping on very small things.It’s crossed all categories of shopping behavior. It’s just the waypeople buy today.” — Bob Thacker Gravitytank Strategic Advisor and former CMO of OfficeMax“Human beings can’t run a mile cross… until May 6, 1954. That was thein under four minutes. It simply day that Roger Bannister, in a meet atisn’t possible.” Oxford, ran a mile in 3:59.4. He broke the Sound crazy? It does now. But for de- barrier. Suddenly, in the next three years,cades it was a common point of view. 16 other runners cracked the four-minuteIt was a mental model: an assumption mile as well.about how the world worked. As Profes- Was there some breakthrough in humansor Jerry Wind of the Wharton School tells evolution? No. What had changed was thethe story: mental model. The four-minute mile seemed like a As it happens, there’s also a classicphysical barrier that humans could not mental model for marketing. For decades 15

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ZMOT: Winning the Zero Moment of Truthwe’ve practiced our craft by focusing on three critical moments: stimulus, shelfand experience. Stimulus. Dad is watching a football game and sees an ad for digital cam- eras. He thinks, “That looks good.” Shelf. He goes to his favorite electronics store, where he sees a terrific stand- up display for that same digital camera. The packaging is great. A young sales guy answers all his questions. He buys the camera. Experience. Dad gets home and the camera records beautiful pictures of his kids, just as advertised. A happy ending.Those three steps have been the mental model of marketing for a long time.Figure 2-1: The traditional 3-step mental model Figure 2-1: The traditional 3-step mental model Stimulus First Second Moment of Truth Moment of Truth (Shelf) (Experience) But the big news for marketers today is the critical new moment between stimulusand shelf in every product category. Dad still watches football and he still sees your TVcommercial. But now he grabs his laptop off the coffee table and searches for “digitalcamera reviews.” He looks at comments from users on CNET and two other sites. Hegoes to Twitter and posts: “Anybody have a great camera for under $100?” He hits You-Tube and searches “digital camera demos.” Before the game ends — and before he getsto the store shelf — he’s ready to make a decision. If you’re a brand manager, you’ve got policies, methodologies, training, shopper mar-keting agencies, partners and budgets to win those original three steps of stimulus, shelfand experience. But what do you have in place to win that grabbing-the-laptop moment — the ZeroMoment of Truth? Probably not much. And you’re not alone. American households now spend as muchtime online as they do watching TV, according to Forrester Research. Yet in 2010, onlyabout 15% of media ad budget money was spent online.1 Online decision-making isskyrocketing; online marketing budgets aren’t. Change your marketing mental model to include ZMOT, and you stand to gain a16

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Chapter 2: The New Mental Modelvery big competitive advantage. Because you’ll reach those millions of shoppers who aremaking decisions before they enter the store. Figure 2-2: The New Mental ModelFigure 2-2: The new mental model Stimulus First Second Moment of Truth Moment of Truth (Shelf) (Experience) Which becomes the next person’s ZMOT And by the way, it’s not just stores and consumer packaged goods we’re talking about.ZMOT is at work across all industries, in B2B and B2C, and in areas like education andpolitics. Voters still see traditional billboards and lawn signs with classic calls to actionlike “Vote for Anderson” or “Punch #107.” But just like that dad looking for a newcamera, voters today make a lot more of their decisions before they reach the ballot box,at the Zero Moment of Truth. * * * Just how important is ZMOT in driving decisions? Google asked Shopper Sciencesto do a comprehensive study of 5,000 shoppers across 12 categories, from groceries tocars to financial products. The goal: show where influence takes place as shoppers movefrom undecided to decided. The data revealed that the average shopper used 10.4 sources of information to makea decision in 2011, up from 5.3 sources in 2010.2 Yes, that number nearly doubled inone year — which shows you just how tough it is for marketers to grab the attentionof consumers today. Shoppers are swimming in information. Those 10.4 sources rangefrom TV commercials and magazine articles, to recommendations from friends andfamily, to websites, ratings and blogs online. We learned that plenty of pre-shopping goes on in every category. Shoppers aredigging up more information, from more sources, before they buy. Here’s how thosesources look in chart form, divided into stimulus, ZMOT and FMOT. 17

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18 0% 0% 10% 10% 20% 20% 30% 30% 50% 50% 60% 60% Saw advertisements on television BaseBase Saw advertisements on television 40% 40% 37% 37% Received mail at home from a brand/manufacturer (e.g., catalogue, brochure) Received mail at home from a brand/manufacturer N=5,003 (e.g., catalogue, brochure) 31% 31% Saw an ad in a newspaper/newspaper insert N=5,003 Saw an ad in a newspaper/newspaper insert Read newspaper articles/reviews/information Read newspaper articles/reviews/information 29% 29% 28% Read magazine articles/reviews/information Read magazine articles/reviews/information 28% 27% 27% Looked at/read magazine advertisements ZMOT: Winning the Zero Moment of Truth Looked at/read magazine advertisements Stimulus Read information in an email received from a brand/manufacturer Stimulus Read information in an email received from a 24% 24% 23% brand/manufacturer Noticed advertising while browsing online Noticed advertising while browsing online Received mail at home from a store/retailer When you considering purchasing [PRODUCT] what (e.g., catalogue, brochure) Received mail at home from a store/retailer Q2 Q2 When you werewere considering purchasing [PRODUCT] what (e.g., catalogue, brochure) Watched a TV show that featured the product sources of information did you out out to with your decision? 22% 21% Watched a TV show that featured the product Figure 2-3: Top sources used by shoppers when making purchase sources of information did you seek seekto help help with your decision? 23% 22% 22% 22% 21% decisions by type (top defined as those above a 17% source usage average) Saw an ad on an outdoor billboard Saw an ad on an outdoor billboard 16% 16% Source: Google/Shopper Sciences, Moment of Truth Macro Study, U.S., April 2011 Source: Google/Shopper Sciences, Zero Zero Moment of Truth Macro Study, U.S., April 2011

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Searched online, used search engine (net) 50% Talked with friends/family about the product 49% Comparison shopped products online 38% Sought information from a product brand/ 36% manufacturer website Read product reviews or endorsements online 31% Sought information from a retailer/store website ZMOT 22% Read comments following an article/opinion 22% piece online Became a friend/follower/”liked” a brand 18% Looked at the product package in the store 41% Read brochure/pamphlet about the product in 37% the store Talked with a salesperson or associate in the store 33% Looked at signage/display about the product 30% in the store FMOT Talked with a customer service representative on 20% the phone Tried a sample/experienced the product in a store 19% Chapter 2: The New Mental Model19

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ZMOT: Winning the Zero Moment of TruthThe overall numbers:Figure 2-4: Sources used by net type 100% 90% 84% 80% 70% 76% 77% 60% 50% 40% 30% 20% 10% 0% Stimulus ZMOT FMOTQ2 When you were considering purchasing [PRODUCT] ofwhat sources out toinformation did you seek out to Q2 When you were considering purchasing [PRODUCT] what sources information did you seek of help with your decision? help with yourBase N=5.003 decision?Base N=5,003Source: Google/Shopper Sciences, Zero Moment of Truth Macro Study, U.S., April 2011 In our study, 84% of the shoppers said that ZMOT shapes their decisions. It’snow just as important as stimulus and FMOT in moving consumers from undecidedto decided. * * * It’s not mind-blowing news that shoppers like to do research, of course. Shoppershave always talked over the back fence and looked into products on their own. As Bob Thacker said at the start of this chapter, determined shoppers would go to thelibrary to see what Consumer Reports had to say about cars or washing machines. Therewere other unique research tools: the Mobil Travel Guide had good advice on hotels.Zagat guides gave out tips on restaurants. (They were even sized to fit in a pocketbook— a mobile app in book form!) But for most items, the barrier was easy access. Freshand detailed information about a given product was the exception.That exception is now the rule. There are no barriers to access. Today’s shoppers carry access in their pockets. Theycreate their own consumer guides a million times a minute with reviews, tweets, blogs,social network posts and videos for products of all kinds. It’s simply the new mental model and the new conversation we all have to be a partof now.20

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Chapter 2: The New Mental Model Procter & Gamble, the originators of FMOT, see the same trend. I talked to my friendsthere recently and they’re adding more emphasis on what they call “store back” — urgingtheir marketers to think about each consumer’s brand experiences working back fromthe shelf to the moments before the store. Speaking of FMOT, notice that all three of the original steps — stimulus, shelf, expe-rience — are still essential. The stimulus still has to drive the consumer to think abouta digital camera. We still want to help consumers make good decisions and choose ourbrand. What’s changed is that the stimulus now drives consumers to a new stopover on theirway to the shelf. When that camera shopper began searching, the information wasn’t“poured on him” — he actively hunted for and pulled down what he wanted. Kim Kadlec, worldwide vice president, Global Marketing Group, Johnson & Johnson,describes the change in mental models this way: We’re entering an era of reciprocity. We now have to engage people in a way that’s useful or helpful to their lives. The consumer is looking to satisfy their needs, and we have to be there to help them with that. To put it another way: How can we exchange value instead of just sending a message? The wonderful potential of this, if you’re willing to work at it, is to have an intimaterelationship with consumers. And that leads to the ultimate moment of truth: when thecustomer buys your product again. * * * Grab your own laptop or smartphone right now — I’m betting they’re not far away— and go to your favorite search engine. Enter the name of your company’s flagshipproduct, or of any other product you like. You probably see the official brand site for that product near the top of the searchresults. So far, so good. Now enter the name of that product and add the word reviews. Then do a new searchand try putting the word “best” with your product category: best law school, best digitalcamera, best hotel in Florida, whatever you like. What else do you see on the page? I’mbetting you see ratings and opinion sites, online stores, coupons, images, demonstrationvideos… and competitor sites.This is the information your shoppers now use to make their decisions. My question for you: Are you happy with what you see? Based on what you see, willsomebody buy your product? Can they even find your product? This is the new digital shelf. Consumers arrive there, 24 hours a day, ready to engage.They’re anybody’s to win or lose. The opportunity is incredible; are you ready for it? The world record for the mile, by the way, is now down to 3:43.13.3 21

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CHAPTER 3 ZMOT ALL AROUND US“We’ve all had those Sunday evening standing-in-front-of-the-mirror moments, when we suddenly know we’ve got to drop afew pounds.In the past you’d go into the kitchen and grab the phone book offthe top shelf and flip through it and probably not even know whatcategory to start with. But now you go online immediately. Theamount of brand and user-generated content available instantly atZMOT is just amazing.Our drive now is almost exclusively online. We have lots ofresources available to prospective health club members, whetherthey hear about us in conversation or have one of those mirrormoments. Even late on Sunday night.” — Dennis Cary Chief Marketing Officer and SVP Bally Total FitnessWhat makes a Zero Moment • The consumer is in charge, pulling theof Truth? information she wants rather than having • It happens online — typically start- it pushed on her by others.ing with a search on Google, Bing, • It’s emotional. The consumer has aYahoo, YouTube or any other search tool need she wants to satisfy, and an emotionalor engine. investment in finding the best solution. • It happens in real time, at any time of • The conversation is multi-way: mar-the day. More and more, it happens on the keters, friends, strangers, websites andgo: mobile searches on Google doubled experts all have their say and competelast year.1 for attention. 23

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ZMOT: Winning the Zero Moment of Truth Last chapter I mentioned that 84% of the decision-makers in our Shopper Sciences2011 Macro Study used online sources to guide them. We also asked those shoppers torate how influential each source was. For those who used online sources, this was thekey stat: 54% comparison-shopped for products online It’s not just the availability of product information that’s changed, but the ways shop-pers think about it. Marketers are used to talking about the purchase process as a fun-nel: Consumers are driven through the broad opening by ads or other stimulus, whittledown their choices, and then drop out the narrow bottom with a purchase. It’s a verylinear way of thinking. But talk to shoppers today about their path to purchase, as I do, and you’ll get sur-prisingly nonlinear answers. As this new data from Shopper Sciences points out, thebehavior of individual shoppers now is iterative and nonlinear. Shoppers don’t alwaysmove through a funnel, narrowing choices as they go; at ZMOT, they can actuallywiden their choices. The more they learn, the more options they consider. The funnel is now more like a neuron, with branches that let shoppers move forwardand backward through the process until they’re ready to make a decision. ZMOT has as many motivations and takes as many forms as there are people online.Here are some classic “ZMOTivations”:Seeking and Sharing New Ideas Ten million times a day, Google sees searches like this: pumpkin bread recipe, low-fatrecipes, Texas-style chili, gluten-free muffins, Thanksgiving side dishes, how to makeold-fashioned chocolate chip cookies. Recipes make up 1% of all searches on Google, in fact.2 Today’s bakers go online toseek out new ideas and deeper details on calories and ingredients. They find more thanrecipes, too. They find stories and reports from food and family magazines, ratings onsites like Epicurious.com, official sites from Duncan Hines, Pillsbury and Betty Crocker,and much more. Sure, recipes can still be found on labels and bags. But today many shoppers havealready made their choice of what to cook or bake before they reach the store.Arming for Battle A customer walks into the dealer and says, “I want to drive the Lexus 250h with thetouring package, the 2.4-liter four-cylinder engine, dual-zone climate control and tanleather with seat warmers. I’ve seen the specs and read the reviews online. And I knowthat the MSRP is $37,125, but your real invoice price is $33,686.”324

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Chapter 3: ZMOT All Around Us What happened? ZMOT happened. This customer started her car-buying journeywith a search for “mid-priced sedans.” She saw ads from seven other brands, storiesfrom MotorTrend.com and RideLust.com, and a lot more. Later she switched to searches like “ratings for Lexus 250” and found reviews fromAOL Autos, Epinions, Cars.com and several other sources. Then she went to Edmundsand Kelley Blue Book to look for prices. And then she went to the Lexus official site tocheck paint and interior colors and other options. If you’ve bought a car lately, you’veseen this woman in the dealership with a handful of ZMOT printouts, or showing hersmartphone screen to the salesperson. Maybe you’ve been that woman yourself. Shopper Sciences analyzed the sources of influence on car buyers over the lengthof their purchase cycle. They asked shoppers, “Did you use search engines in yourdecision?”, “How influential were search engines in your decision making?” Then theyturned the results into this heat map:Figure 3-1: Net influence of search engines heatmap for auto Fewest People Most People 10 9 8 Degree of In uence 7 6 5 4 3 2 1 re re re re e e re re re se or or fo fo fo fo fo fo fo ha ef ef be be be be be be be rc sb sb pu os os os th k ys ys k k ee on ee ee da da m m m of w m w w + 6 3 y 6 3 1 12 Da – – 1 3 2 – – 4 2 7– 4 2 Time From PurchaseBase N=500Source: Google/Shopper Sciences, Zero Moment of Truth Automotive Study, U.S., April 2011 25

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ZMOT: Winning the Zero Moment of Truth What do car shoppers learn through search engines? It turns out that 64% say theylook for price, 44% say vehicle performance and 37% say styling.4 Many were askingthose questions four months before they bought their car.Making Smart Choices Fast Let’s go back to that minivan mom we mentioned in chapter one. Her ZMOT lookslike this: She knows her son isn’t feeling well, and now she’s parked at school with hermobile device, searching for a decongestant. She’s looking for: 1. More information about the product, and 2. Experiences that others have had with the product, and 3. Offers, discounts and coupons In that moment she’ll make two decisions: what to buy and where to buy it. So whenshe sees that a particular decongestant has good ratings, and that her local Walgreens isoffering a coupon for $1.50 off, that sale has probably been made. * * * You see the advantage. If you’re available at the Zero Moment of Truth, your cus-tomers will find you at the very moment they’re thinking about buying, and also whenthey’re thinking about thinking about buying. You can personalize your message forgreatest impact with each possible moment and motivation. You can also send your message to just the people you want. As Kim Kadlec of Johnson& Johnson points out, “You can deliver your message to a thousand moms who havekids ages 3 to 8, instead of just a thousand women.” And the “dwell time” that consumers spend during ZMOT is much longer than thetime they’ll spend at a store shelf. Here’s a sampling of purchase cycle lengths acrossthree very different categories:26

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Chapter 3: ZMOT All Around UsFigure 3-2: Average purchase cycles for three diverse categories 23% Automotive 17% 17% 10% 7% 4% 5% 6% CPG Grocery 2% 3% 1% 1% 0% 0% 17% 1% 7%Technology 0% 0% 1% 11% 0% 1% 21% 1% 14% 17% 2% 17% 1% 6% 5% 15% 13% 1% 5% 3% 4% 8% 9% 3% 6% More 4% than a year 4–6 1% before months A month 1% 1% 2% before before 2 weeks 3% before 4–6 days 3% before One day before 5–8 hours 1–2 hours before A few before moments before I purchasedSource: Google/Shopper Sciences, Zero Moment of Truth Industry Studies, U.S., April 2011Automotive N=500, CPG Grocery N=500, Tech N=500 That’s a lot of dwelling. Google has studied paid ad clicks through what we call a search-ad pause analysis,to see what happens when advertisers turn paid search off. We looked at hundreds ofpaused campaigns to see if the advertisers could make up their lost paid clicks withclicks from regular organic search results. For the most part, they couldn’t: on average,89% of paid clicks were truly incremental.5 In short, with ZMOT you have a powerful shot at truly influencing customers inthose “before the store” moments. * * * ZMOT becomes even more important when money is tight. The average household spent $312 a month on groceries in 2010, according tothe U.S. Department of Labor. If you’re a typical family, you can’t afford to buy thewrong kind of peanut butter or frozen dinners, because that seven bucks spent on thewrong product means now you can’t afford dessert or a treat for your kids at the end ofthe month. My Google colleague Catherine Roe gave me a perfect example the other day: I have a neighbor who’s not tech savvy, but when the recession hit, we were talking and she said, ‘I’ve got four boys and I’m at the grocery store five days a week and it’s just killing us. We’ve got college coming in a few years. I’ve got to start looking at how I’m spending my money.’ 27

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ZMOT: Winning the Zero Moment of Truth She started couponing online. Then once she became savvy about sites like Coupons.com, she started looking at circulars and specials online and plan- ning her meals out a week in advance. And then she also began to do research online for almost every product she bought to see what other people had said about it. It’s contagious. She doesn’t call it ZMOT, but she does tell me that now instead of going to the store five days a week, she’s going one or two times a week. With coupons and research and planning her meals, she’s saving $200 to $250 a month. She told me, ‘That’s college money for us. That’s a vacation.’The Wall Street Journal said the same thing in a 2011 article titled, “In-Store Sales BeginAt Home”: It’s well known that consumers research expensive products like electronics online, but coming out of the recession, consumers are more scrupulous about researching their everyday products such as diapers and detergent, too. More than a fifth of them also research food and beverages, nearly a third research pet products and 39% research baby products.6 Today, 62% of shoppers say they search for deals online before at least half of theirshopping trips, according to that same article. There are two heroes in all these stories: the consumer who does the research, andthe grocery store manager or marketer who is smart enough to be there at the momentthe shopper is looking for them. As Rishad Tobaccowala of VivaKi says: “Don’t call them search engines. Call themconnection engines.”28

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CHAPTER 4 R AT I N G S A N D R E V I E W S : WORD OF MOT“This is the first time in history that word of mouth has becomea digitally-archived medium.” — Brett Hurt Founder and CEO BazaarvoiceThe tremendous explosion of best history teacher. “Mesopotamia 401ratings and reviews online has with Professor Janney” — five-star classchanged how people get informa- or bummer? You’ll find out at ZMOT. It’stion. But the change is still based where decisions are made.on that oldest of human traits: What does word of mouth lookword of mouth. like online? “Word of mouth is the medium we’ve • Consumers talking directly throughbeen using since the tribal days to talk email, social networks, chat and IMs, orabout essential knowledge,” says Brett posting videos on YouTube and other sitesHurt of Bazaarvoice. “Where’s the hunt- • Reviews on sites like Epinions, TripAd-ing good? Where’s the fishing good? How visor, DealerRater and Yelpdo you not get eaten by the saber-toothed • Comments and ratings that show uptiger?” next to businesses on applications like Except today’s tribal members aren’t Google Mapstalking about tigers — they’re talking • Message boards on corporate and re-about your product, every day, on a dozen tail sites of all kindssites you’ve heard of and a thousand sites • Online community sites where moms,you haven’t. There are star ratings, reviews golfers, chefs or skateboarders compareand raves online for every last detergent, notes and share informationmultivitamin and Snuggie in your local • Seller ratings in search results (searchdrugstore. Look up any university in the for “kids bikes” on Google and you’ll seecountry and you can find out who’s the the stars right at the top) 31

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ZMOT: Winning the Zero Moment of Truth But there’s one critical difference between old-fashioned word of mouth and thedigital version. “Talking over the hedge is one-to-one,” says Prof. Dave Reibstein, theWilliam Stewart Woodside Professor at The Wharton School. “Digital word of mouth isone-to-millions. If you have a good experience, it’s shared and re-shared with millions.You post it and suddenly, it’s flying.” * * * Audiences are asking three things about your product: • Will it save me money? • Will it save me time? • Will it improve my life?When people ask each other about your product at ZMOT, you can bet they’ll betalking about one of these three things. They probably already have a general idea of what they want. “I know a new TVis going to cost $500. I have $500. I just want to make sure I buy the very best TV forthat money.” And you can bet they’ll be close to making a decision. That’s why they’re standingin the aisle tapping away on their mobile phone, after all. Ratings and reviews are littlesignposts left by decision-makers for other decision-makers. The people who read themare not just noodling around online. These are people who are planning to buy. * * * CEOs and CMOs tend to get nervous about online ratings and reviews — especiallyabout opening up their own sites to user comments. What if somebody says somethingnegative? What if a whole lot of people do? My answer to that is, relax. Here’s why: Most reviews are good. “We’ve found that the worldwide average for prod-uct reviews is a 4.3 out of 5.0,” says Brett Hurt of Bazaarvoice. His company providescustomer conversation services to corporations ranging from Wal-Mart to Johnson &Johnson. According to Brett, 80% of all reviews online are four to five stars. There’s more: “We find that there’s a new version of the 80–20 rule: 80% of reviewson the site of a given retailer are written by the top 20% of their customers by lifetimevalue. We call them the super shoppers.” The math is simple enough: People like to talk most about the products they love the most. Bad reviews aren’t all bad. “People are scared to death of messaging notbeing all positive,” says Dave Reibstein. “But negative comments add authenticity.” Brett Hurt puts it another way: “Fear of the negative is the thing that still really holdsback adoption of the Zero Moment of Truth. We see that fear especially with people like32

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Chapter 4: Ratings and Reviews: Word of MOTdentists or real estate agents, businesses that are more about a person than a product.But the truth is, negative reviews increase conversion rates for all kinds of businesses,because people see them and know that they’re shopping in a truthful environment.” If you’re building an awful product, that’s one thing. But if your product is good (asit surely is) then you really shouldn’t fear the occasional negative comment. The conversation is already going on. Right now, at this moment,people are talking about your product online. You can’t start it or stop it. You canchoose not to engage, but that’s really like sticking your head in the sand while acompetitor jogs by to grab your customers. Better to welcome the conversation and bepart of it yourself. As Brett Hurt puts it, “Word of mouth online has got to become partof the central nervous system for every company.” * * * Why would people make decisions based on the opinions of strangers? They don’t.They make decisions based on the opinions of people like themselves. Which is who theyfind at ZMOT. “That’s the mindset I’m in when I’m using online platforms,” says Tina Sharkey,chairman and global president of BabyCenter. “On our site we see parents asking: ‘Mychild just lost her first tooth. What are the going rates for the Tooth Fairy? When is ittime to tell the truth about the Tooth Fairy? How do I handle that?’” You’ll see the same thing happen whether the topic is the Tooth Fairy or accountingsoftware for a 20,000-person corporation. People look for others who have been in thesame situation as they are now. They know that fellow consumers (unlike advertisers)aren’t trying to sell them something. Our 2011 ZMOT study found that 37% of shoppers find online social sources to bean influential driver when making decisions. That was up from 19% in 2010 — nearlydoubling in one year. The top online social activities among shoppers: • Getting an online referral from a friend • Becoming a friend or follower of a brand • Reading blogs where the product was discussed • Seeing the brand mentioned on a social networking site like Facebook People have a powerful urge to share knowledge once they reach their own “momentof mastery,” as Tina Sharkey calls it. “That parent who has the kid with the certainallergies, she now knows how to navigate that. And she wants to share. She wentthrough it, she acquired the knowledge herself, and now she’s trying to really help andsupport others.” Most of us have empathy for people who are right behind us, going through the samething. And if we can make it easier for them, we do. You know the old saying: “If onlyI knew then what I know now.” 33

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ZMOT: Winning the Zero Moment of Truth The truth is that for many shoppers in many categories, the single most powerfulimpetus to buy is someone else’s endorsement. Google is so convinced of this that we created the +1 button, which lets anyonerecommend products, services and websites to friends with a single click. While lookingat a website or even at search results, you click the “+1” button to tell your friends, “I’ma fan of this.” Next time your friends search, they will see your recommendation belowthe search result for that page. You become part of their ZMOT. A kind of super-value is created when search and social media are combined this way.It’s classic word of mouth, like asking friends if they’ve visited Mount Rushmore or ifthey know a good place to stay in Lake Tahoe.Figure 4-1: Example of Google’s +1 button in search resultsSource: +1 as illustrated on the Google Official Google Blog on 3/30/11 But it’s word of mouth that you can find exactly when you need it. You don’t haveto comb through emails or hope you can find the right friend at the right moment. If Isearch for a hotel online and six of my friends have given it a “+1,” my decision is made. * * * Let me make another point about ratings and reviews online: They’re a tremendousresource for customers, but they’re also a tremendous resource for businesses. “ZMOT is an incredible source of insight for brands to really understand how satis-fied their customers are on a real-time basis,” says Brett Hurt. “You can see what people are saying to each other about your product every day,which is a totally different idea than a survey. It’s like I went to a market research firmand said, ‘I don’t want to just survey the general public about my product; I want thepeople who are likely to talk about it and express a strong opinion.’ “A focus group is artificial. People are paid to be there. They know that there areagency people behind the glass watching them,” he says. “The only thing that’s pure and34

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Chapter 4: Ratings and Reviews: Word of MOTauthentic in terms of what’s actually happening in the marketplace is how people talkto each other. “For businesses, ZMOT has evolved from a simple, ‘I need to increase my salesonline,’ to a holistic approach of, ‘Oh my gosh, I can actually be better informed thanI’ve ever been before about marketing and merchandising.’ An observant product man-ager can find out precisely why they’ve been getting a high return rate or why they’vebeen getting high sales.” A machine that lets you know exactly what your customers are thinking as they makeproduct decisions? That shows what they want and need from you? And even lets youreply to them if you want? What a concept. Except it’s no longer a concept — it’s how people actually share today at ZMOT. 35

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CHAPTER 5 E Q U A L T H O U G H T, N O T AFTERTHOUGHT“What we face now is a pace of change that is unprecedented.Major innovations that used to change our lifestyles maybe onceor twice in a generation, we’re seeing that now almost on anannual basis.So what needs to be top of mind for all marketers, no matterhow established their brand is, is to stay relevant amongour consumers.We have to think about how the lives of our end users are changing,whether that end user is a consumer, a patient, a doctor oranyone else. And to remain relevant we need to be part of theirnew ecosystem.” — Kim Kadlec Worldwide Vice President Global Marketing Group Johnson & JohnsonIf there’s one truth I’d like you to other three. And in fact, it can help youtake away from this book, it’s this: keep those other three plates in the air.ZMOT must be an equal thought, There are certain objections to ZMOTnot an afterthought. that we hear all the time. Let me share a Remember the plate-spinning acrobats few with you.you used to see at the circus? If you’re a “Nobody looks online forbusiness owner or brand manager, you’ve toothpaste or paper clips.”always had three plates to keep spinning:stimulus, shelf and experience. Really? Tell that to 3M. In the first year I’m here to tell you that ZMOT is a after they started taking website com-fourth plate. It’s just as important as the ments about Scotch Tape, they got almost 37

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ZMOT: Winning the Zero Moment of Truth3,000 comments from users. Comments like this: I use this tape all the time because it holds the things I want to hold together without being seen. I have used this product for years and will continue using it for many more years. Yes, people take the time to leave messages online about how much they loveScotch Tape. That’s because the effort is down to zero. You would never get in your car, drive to thelibrary and walk up to the second floor and ask a sleepy librarian for Consumer Reportsbefore buying a 39-cent ballpoint pen. The effort and the item are imbalanced. But nowthere’s no friction. You can pull out your mobile phone and look it up — or leave yourown opinion — on the fly. When I go to a presentation at, say, a Hilton Hotel, I tell the audience this: “There aremore reviews online for the Bounce Dryer Bar than there are for the hotel we’re sittingin right now.” It always startles people, and it’s always true. ZMOT is not just for vacations and cars and refrigerators. It’s for a $5.99 bottle ofdandruff shampoo or a $3.29 box of cereal or that 39-cent pen. People like to learnabout and participate with all the products they use. Believe me, your great product isno different. Consumers have learned to apply the strategies they’ve used for buying carsand refrigerators to everyday items. “It doesn’t apply to my industry.” Classic objection. Beth Comstock, the senior vice president and chief marketing officer of General Electric,has a pretty good perspective on this, since GE makes everything from light bulbs to jetengines. She says: Maybe if you make locomotives, or the software that automates production lines, you think: Why should I have videos or web content out there? Who’s going to use that? But one day at our marketing council we did YouTube searches for just those kinds of things. And you know what? Up came hundreds of videos, including videos from our competitors on things like intelligent thinking for production line automation. It was a great eye-opener. I think we could have entered any topic and found the same thing. We’ve seen enough data to know that C-level executives do their own search queries for research before they ever meet with potential suppliers. Whether you’re buying a new refrigerator or a jet engine, you want to do your home- work in advance. If you’re not visible online when people are doing that homework, believe me, they’llfind others who are. Here’s what Brian Dunn, the CEO of Best Buy, told RetailGeek.com38